A country wants to maintain a fixed exchange rate with the Canadian dollar,but at the current exchange rate,its currency is in excess.Which policy can the country NOT adopt to maintain its exchange rate?
A) Buy domestic currency and sell Canadian dollars in the foreign exchange market.
B) Sell domestic currency and buy Canadian dollars in the foreign exchange market.
C) Impose foreign exchange controls.
D) Contract the money supply to raise domestic interest rates.
Correct Answer:
Verified
Q201: One limitation of maintaining a fixed exchange
Q203: A depreciation of a currency below the
Q210: A major drawback of a floating exchange
Q217: When countries seek to maintain fixed exchange
Q218: Use the following to answer questions:
Q223: Which argument was made against Britain's adopting
Q228: A reduction in the value of a
Q234: Devaluation of a currency occurs under _
Q238: An increase in the value of a
Q240: A reduction in the value of a
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents